Ohio lender offers students options

Despite the current financial crisis, Ohio's designated provider of federal student loans says it will continue to help families pay for college.

Student Lending Works is taking advantage of a new Department of Education initiative to make capital available to lenders so they don't walk away from the federal loan program.

Earlier this year, Congress passed a law that gives the Education Department authority to buy up lenders' loans.

By taking part, Student Lending Works says it can ensure Ohio families that there will be no shortfalls in federal loans to borrowers in the academic year ahead. Student Lending Works borrowers also will be the first in line to have future loans funded with state tax-exempt money when the credit crisis has finished, the nonprofit group says.

Despite the current financial crisis, Ohio's designated provider of federal student loans says it will continue to help families pay for college.

Student Lending Works is taking advantage of a new Department of Education initiative to make capital available to lenders so they don't walk away from the federal loan program.

Earlier this year, Congress passed a law that gives the Education Department authority to buy up lenders' loans.

By taking part, Student Lending Works says it can ensure Ohio families that there will be no shortfalls in federal loans to borrowers in the academic year ahead. Student Lending Works borrowers also will be the first in line to have future loans funded with state tax-exempt money when the credit crisis has finished, the nonprofit group says.

The lower costs will allow Student Lending Works to pass savings on to borrowers in the form of discounts, officials say.

Once the capital markets recover, Student Lending Works expects to have access to more than $200 million in tax-exempt funding. To date, the state has authorized $440 million for the creation of low-cost loans for students and parents across Ohio.

Instead of outright selling their loans to the Department of Education, Student Lending Works has chosen to put their loans in a temporary holding facility, giving the group the opportunity to repurchase the rights to the loans from the Education Department in the future.